On Tuesday, Donald Trump inked an executive order banning transactions with eight Chinese software applications. It includes Ant Group’s Alipay mobile payment app. The ban escalates tension with Beijing two weeks before the President-elect Joe Biden takes office. Individually, U.S. officials consider prohibiting U.S. citizens from funding in Alibaba Group, an affiliate of Alipay’s parent, and Tencent Holdings.
The Trump administration has advanced the pressure on Chinese organizations in its final months in office. It involves companies which the officials consider as a national security risk. President Trump has signed executive orders against many Chinese companies claiming they could transfer data with the Chinese government. Tuesday’s executive order bans transactions utilizing QQ Wallet, CamScanner, SHAREit, Tencent QQ, VMate, WeChat Pay, and WPS Office and Alipay.
Donald Trump bans Alipay along with seven other Chinese Apps
The executive order is the most recent escalation by the Trump administration against China. Under Donald Trump’s leadership, the White House has enhanced tariffs and pursued a trade war. It has also targeted Chinese-owned social media services, stating they supply a line for Chinese intelligence and pose a national safety risk to the American public. Before, the Trump administration published executive orders prohibiting two other popular Chinese-based social media services, TikTok and WeChat.
However, one should note that the ban occurs ahead of China’s digital yuan launch, which may influence China’s crackdown on Ant Financial and other Jack Ma companies. The launch of CBDC may hinder Alipay’s micro-lending business and supply the unbanked with financial services while also attracting commercial banks’ deposits.
According to analysts, China has been stimulating its efforts on the CBDC front. Moreover, it appears to be well forward of the U.S. in creating a digital currency. By running after Ant now and forbidding Alipay, the U.S. could be indirectly supporting the Chinese government’s gain with its digital currency revolution as people will have no alternative but to adopt its payments system. The reason for the order is also interesting, as all types of apps in the U.S. and elsewhere, whether financial or not, have the authority to access people’s personal information.
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